T2S Release 3.2: Xact Web Portal and SWIFT ISO 15022 modifications

15.11.2019

Clearstream Banking AG, Frankfurt1 informs customers about the upcoming TARGET2-Securities (T2S) Release 3.2 that will deployed on

the weekend 16 and 17 November 2019
for business day, Monday, 18 November 2019

The Xact Web Portal and SWIFT ISO15022 will be enhanced to enable the access to services provided in the scope of T2S Release 3.2. This Announcement details the enhancements related to:

  • T2S CR 606 – T2S should maintain information related to ”Place of trade” and ”Place of Clearing”;
  • T2S CR 609 -T2S must be able to report ”PENF” settlement status for settlement instructions for which settlement at the Intended Settlement Date (ISD) is no longer possible;
  • T2S CR 653 - Partial Release functionality.

Description of the changes

T2S CR 606 – T2S should maintain information related to ”Place of Trade” and ”Place of Clearing”

The Central Securities Depository Regulation (CSDR) requires an enhancement of the instruction details. The “Place of Trade” and “Place of Clearing” fields are to be supported when entering the instruction and shall be included in the settlement reporting.

Currently, T2S allows the entry of “Place of Trade” and “Place of Clearing” in the automated message transfer  (A2A via settlement transaction instruction, sese.023), but does not use the information for further processing and reporting.

The field “Place of Clearing” is intended for optional use and can be provided as BIC8 but is recommended to be submitted as BIC11. This information will be forwarded by Clearstream to T2S.

CBF customers can already enter the fields “Place of Trade” and “Place of Clearing”. Therefore, there is no change on the customer side. Hence, messages that are presented in ISO 15022 can be transmitted as today. The “Place of Trade” (field :94B::TRAD//) and ”Place of Clearing” (field :94H::CLEA//) can be transmitted in delivery versus payment (DvP) and free of payment (FoP) instructions using MT540 - MT543. The details provided in instructions will be reported in MT536, MT537, MT544 - MT547 and MT548.

Via Xact Web Portal the entry of “Place of Trade” and “Place of Clearing” is enabled via the “Securities Instruction screen”. Please find below a sample of the screenshot:

To enlarge click on the image

T2S CR 609 – T2S must be able to report ”PENF” settlement status for settlement instructions for which settlement at the Intended Settlement Date (ISD) is no longer possible

The CSDR requires an update of the status concept for pending instructions. A CSD must be able to distinguish between:

  • “Pending settlement instructions”
    for which settlement at the Intended Settlement Day (ISD) is still possible.
  • “Failing settlement instructions”
    for which settlement at the Intended Settlement Day (ISD) is no longer possible.

Customers have to consider that the implementation is carried out in two steps. With T2S Release 3.2, T2S will implement the new status “Failing” and transmit the indicator with the existing status reporting if an instruction could not be settled on the Intended Settlement Date (ISD). This means that the status code "PENF" is not reported before the next status change. With T2S Release 4.2 (T2S-CR-0692-SYS), the comprehensive reporting functionality is activated, and the status is transferred for the first time once the related "T2S cut-off time" has been reached. The table below defines the T2S cut-off times for the different instruction types.

Settlement instruction types

T2S cut-off time

Delivery versus Payment (DvP)

Receipt versus Payment (RvP)

Delivery with Payment (DwP)

Receipt with Payment (RwP)

16:00

DvP / RvP instruction with the BATM flag (usage of label “ADEA”
(Accept After Regular Settlement Deadline))

17:40

Delivery free of Payment (DFoP)

Receipt free of Payment (RFoP)		18:00

CBF will update the list of possible status and reason codes to allow the transmission of the related T2S values via IS0 15022 and via the Xact Web Portal.

T2S CR 653 - Partial Release functionality

The new T2S functionality will enable the partial release of the quantity specified in a pending securities settlement transaction instruction (settlement transaction instruction, sese.023). The Partial Release functionality is offered for delivery instructions (delivery versus payment (DvP), delivery free of payment (DFoP) and delivery with payment (DwP)). This service will not be fully available with the deployment of T2S Release 3.2. T2S plans to gradually correct the deviations identified during the test in the coming months up to the implementation of T2S Release 4.0 (June 2020). The details of the required issue resolutions are described at the end of this section as "Known Limitations”.

The Partial Release request can be initiated with the “Hold / Release functionality” by specifying the quantity to be released. T2S will execute the request within all defined Partial Settlement windows during the day and night-time settlement (NTS). Especially for the NTS, T2S defines that Partial Settlement can be executed during the “Last Cycle” in Sequence X.

If a Partial Release request is accepted by T2S for settlement during a current Partial Settlement window, the transaction is considered within this processing step. However, it has to be considered that Partial Release requests:

  • Can only be submitted from Start of Day (SoD) on Intended Settlement Date (ISD) at 18:45 enabling a settlement with the start of the night-time processing (First and Last Cycle, Sequence 4).
  • Setup for DvP and DwP instructions will be considered until 16:00 on the settlement date and will be reported as failed with the End of Day reporting, if the settlement could not be (fully) achieved.
  • Setup for DFoP instructions will be considered until 18:00 on the settlement and will be reported as failed with the End of Day reporting, if the settlement could not be (fully) achieved.
  • Failed on a settlement date must be reinstructed – if required as T2S expects a new Partial Release request.

If a Partial Release request cannot be (fully) executed on the business day, the Partial Release process is stopped, and the underlying instruction is set on hold. Only when all these requirements are met, T2S will accept the Partial Release request and will submit the instruction for settlement processing. The settlement will be executed during the upcoming Partial Settlement window if:

  • The transaction is still pending and matching was performed;
  • The Counterparty allows Partial settlement and the cash threshold is sufficient for the released quantity. However, the counterparty does not have to agree on the Partial Release request) as such; and
  • The cut-off time for the Partial Request has not yet been reached.

T2S will stop the Partial Release process if:

  • A (new) hold on underlying instruction or counterparty instruction was initiated;
  • A standard release of underlying instruction was provided;
  • The underlying or counterparty instruction is not flagged for partial settlement;
  • Instruction linking, or pooling applies or will be requested by the customer or counterparty;
  • The Partial Settlement indicator is “PARC” and the released quantity is less than the quantity resulting from the cash threshold equivalent in the underlying settlement instruction.

In line with the service offering defined by T2S, the ISO 15022 connectivity for Xact via SWIFT and Xact File Transfer as well as the Xact Web Portal will be updated to enable the creation and deletion of Partial Release requests.

  • The Partial Release request can be instructed via MT530.
    Customers must populate the following fields:
    • :22F::SETT//YPRE
      :36B: in sequence C with the security quantity.
  • The Partial Release request can be cancelled via MT530.
    Customers must populate the following field:
    • :22F::SETT//NPRE in sequence B.

In case of a Partial Release request, the remaining quantity to be released (must be different from zero) will be reported as follows:

  • In the MT548 using field reason narrative :70D::REAS in Subsequence A2a defining the value “PQRT”, and;
  • In the MT537 field reason narrative :70D::REAS
    • in subsequence B1 with the value “PQRT”, if :22H::STST//STAT is present;
    • in subsequence C3a with the value “PQRT”, if :22H::STST//TRAN is present.

Customers can instruct or cancel Partial Release requests via Xact Web Portal using the new option “Creation Partial Release” or “Cancel Partial Release” accessible via “List view” and “Detailed view” on Xact Settlement screen, on existing “On Hold” instructions.

The creation of a Partial Release request requires the following conditions:

  • The selected instruction is a Delivery Customer Instruction for CSD accounts (48xxx or xxxx-xxx), and
  • Party Hold is set to “True” in “List view” or ticked in “Detailed view”.

When selecting “Creation Partial Release”, Party Hold must be unticked, and a settlement quantity has to be entered.

A Partial Release request can be cancelled via the function “Cancel Partial Release”, if

  • The selected instruction is a Delivery Customer Instruction for CSD accounts (48xxx or xxxx-xxx); and
  • Party Hold is set to “True in List view” or “ticked in Detailed view”; and
  • The requested partial release quantity is not zero.

The “Detailed view” will show:

  • Requested Partial Release quantity
  • Quantity Remaining Released
  • Quantity Remaining On Hold

Please find below a sample of the screenshot.

New content item

To enlarge click on the image

Known Limitations related to T2S CR 653

Customers are recommended to review the specified production problems for operational and / or functional changes in their processes.

  • Cross-border instructions CSD partial release not initiated

    For the cross-border instruction, the partial release was not initiated during partial settlement window (PSW) even though the Partial Release request was successfully instructed. During the PSW no status reporting was provided, but a cancellation message with the rejection code “SPSA005” was transmitted after the cut-off time.

    This issue is intended to be solved with priority ("Hot Fix"). The current plan envisages a delivery of the correction on Friday, 30 November 2019.
  • Maintenance of Partial Release requests

    During the testing, two deviations in the maintenance of Partial Release requests have been reported. If a “full release” is transmitted to an instruction that is partially released, T2S will not consider the instruction for the full release. The intended update of the instruction can be achieved, if the customer transmits in a first step a “Hold” instruction and in a next step the “Release”.

    In addition, T2S informed that if a partial release process is cancelled, the status reporting is not always presented in the right order (that is, T2S presents the new status prior to the reporting of the cancellation request).

    This issue will be resolved in steps. For the issue related to the “full release” a "Hot Fix" will be delivered on Friday, 30 November 2019. After the implementation, T2S will reject the maintenance instruction requesting a “full release” on an instruction that is currently partially released. The above-mentioned workaround using “Hold” / “Release” instructions will still be possible. The resolution of the further functional deviations will be agreed with the Change Request Group (CRG). CBF will inform customers about the next steps.

Further information

For further information, please contact the Clearstream Connectivity Helpdesk or your Relationship Officer.

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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.